Goldman Sachs in Financing €3.7 Billion Real Estate Purchase

July 3, 2006

Cleary Gottlieb represented the Goldman Sachs European Special Situations Group in connection with its origination of €2.7 billion senior and mezzanine secured financing provided to a vehicle formed by the Whitehall Funds and KarstadtQuelle Group, the German retail department store chain, for the purpose of acquiring Karstadt’s real estate portfolio in a sale leaseback transaction.

Cleary Gottieb helped structure the transaction and negotiated the credit agreements and all associated security documents (including mortgages over more than 170 properties). The acquisition price was €3.7 billion, which included the assumption of €900 million of existing debt, in respect of which Cleary Gottlieb negotiated intercreditor arrangements. The firm also assisted in the syndication of the mezzanine loan, which is ongoing, through creation of five levels of structured subparticipations and associated intercreditor arrangements. The senior loan is to be subdivided and partially securitized later in the summer.

KarstadtQuelle is Germany’s largest department store and mail order group. Whitehall is a collection of funds investing in real estate worldwide.